What happened?
After a muted first half of 2025, Singapore’s shophouse market recorded a clear rebound in the third quarter. Caveated transaction data shows 27 shophouse deals in Q3 2025, a 50 per cent increase quarter on quarter and the highest quarterly volume in almost two years.
Total transaction value rose even more sharply. Shophouse sales in Q3 reached about S$210 million, representing an increase of more than 65 per cent compared with Q2. Activity returned across conservation, freehold and mixed-use shophouses, signalling a broad-based recovery rather than isolated deals.
👉 Rozi’s Field Notes
Markets rarely turn quietly. When activity returns after a lull, it usually means buyers have already made peace with uncertainty. Q3 tells us confidence did not disappear earlier this year, it was simply waiting for the right conditions.
Why it matters?
The rebound reflects a combination of financial, policy and structural factors that continue to support shophouse demand.
Financing conditions have stabilised. While interest rates are no longer at historic lows, borrowing costs have eased from earlier highs, improving deal feasibility and investor sentiment. This has encouraged buyers who were previously cautious to re-enter the market.
Shophouses also continue to enjoy a favourable policy position. They are not subject to Additional Buyer’s Stamp Duty or Seller’s Stamp Duty, unlike residential properties. In an environment where residential cooling measures remain firmly in place, this makes shophouses relatively more attractive for capital allocation.
At the same time, Singapore’s status as a safe and stable investment destination remains unchanged. In periods of global uncertainty, investors tend to gravitate towards scarce, tangible assets with long-term relevance, and shophouses fit this profile closely.
👉 Rozi’s Field Notes
This is not about chasing the next hot sector. It is about capital flowing back into assets that quietly protect wealth when volatility rises elsewhere.
Transaction trends and buyer behaviour
Q3 activity was led largely by higher-value transactions. About 60 per cent of caveated deals were priced above S$5 million, indicating that family offices, high-net-worth individuals and institutional buyers were key participants in the rebound.
Buyers were selective, focusing on well-located city fringe and prime areas, as well as shophouses with strong long-term fundamentals. Many of these purchases appear to be driven by longer holding horizons rather than short-term trading intentions.
👉 Rozi’s Field Notes
When larger buyers move first, they often set the tone for the rest of the market. This kind of activity tends to establish confidence and pricing stability before wider participation returns.
What is happening on the leasing front
Despite stronger sales momentum, leasing performance remained mixed in Q3. Median shophouse rents were generally flat or slightly softer compared with the previous quarter. This suggests that while investors are moving ahead, business expansion and rental growth are recovering more gradually.
Such divergence is not uncommon. Capital markets often move ahead of leasing markets, especially during early recovery phases.
👉 Rozi’s Field Notes
Investors buying today are often looking beyond current rents. They are positioning ahead of a gradual recovery in footfall, tourism and business activity, rather than reacting to short-term leasing numbers.
What this means heading into 2026
With interest rates stabilising, policy conditions unchanged and supply of shophouses inherently limited, analysts expect the sector to remain resilient into 2026. While quarterly transaction volumes may fluctuate, the structural appeal of shophouses as legacy and capital-preservation assets continues to underpin demand.
👉 Rozi’s Field Notes
This feels less like a temporary bounce and more like a reset in confidence. For buyers who understand the role shophouses play in a long-term portfolio, Q3 2025 marks a return to measured, intentional buying.